Navigating the Latest Sales & Use Tax Law Updates
The State of Minnesota has a large number of sales and use tax jurisdictions that range from small towns to large cities and counties and everything in between. Legislative changes are enacted each year that impact the collection and remittance of these taxes. Below is a summary of a few key highlights from the latest legislative session.
CHANGES IN LOCAL TAX RATES
Beginning on October 1, 2023 there will be two additional sales taxes totaling 1% applied to the seven-county metro area. The counties included are Anoka, Carver, Dakota, Hennepin, Ramsey, Scott and Washington.
CHANGES IN MOTOR VEHICLE EXCISE TAX
The motor vehicle excise tax is the tax charged on most motor vehicle sales or transfers. The tax amount increased in July of 2023 to 6.875% from 6.5%.
RETAIL DELIVERY FEE
Coming into effect in July of 2024 there will be a 50 cent retail delivery fee. This fee applies to deliveries that have a sales price over $100 and are subject to Minnesota sales tax. This fee will be exempted for businesses with less than $1 million in sales. The fee also has many exemptions including: retail sales of food and beverage, drugs and medical devices, baby products and others. More guidance is expected to come out before the end of the year.
SALES TAX CALCULATOR
The Minnesota Department of Revenue has a sales tax calculator to assist in determining the rates that should be charged based on location. Enter an address, 9 digit zip code or use the interactive map to determine the sales tax that should be charged. The 9 digit zip code is the most accurate way to find your applicable rate.
PENALTIES & INTEREST
For filing incorrectly or missing deadlines, penalties can be up to 25 percent of an associated liability, and interest can be up to 15 percent.
QUESTIONS ABOUT SALES & USE TAX
For additional information, visit the Minnesota Department of Revenue website. Or, for more specific sales tax questions regarding your industry check out the Minnesota Department of Revenue’s Sales Tax Fact Sheets and Industry Guides.
If you have additional questions regarding changes or assistance with your sales tax needs, Smith Schafer can help!